Everyone knows that estate planning has a financial element at its core. Clearly, you must take steps to make sure that your assets wind up in the hands of your heirs after you pass away.
The best way to go about this will vary on a case-by-case basis, and we examine vehicles of asset transfer quite frequently on this blog.
However, in this post, we are going to look at a different component that should be contained within your estate plan if you want to be comprehensively prepared for the eventualities of aging.
Estate planning can seem like something that is exclusively about postmortem events. This is part of it, but a holistic estate plan should include an incapacity planning component to account for contingencies that you may face as an elder.
Late in your life it is possible that you will become unable to make your own medical and financial decisions. Even if there was no other cause of incapacity, the existence of Alzheimer’s disease alone makes incapacity planning a must.
The Alzheimer’s Association tells us that 32 percent of people who are at least 85 years of age have contracted the disease. This scourge on our nation’s seniors strikes people who are younger as well, with about 10 percent of people who are at least 65 suffering from the disease.
Among other things, Alzheimer’s disease causes dementia. People with Alzheimer’s induced dementia are not going to be able to make their own decisions in many instances.
If you are in this position without having made any provisions for the possibility in advance, the state could wind up appointing a guardian to handle your affairs. This could be someone that you would not have chosen if you had the ability to make the choice.
To prevent this outcome, you can select your own hand-picked decision-makers in advance by executing legally binding documents called durable powers of attorney.
What’s the “durable” part all about? A standard power of attorney would not remain in effect upon the incapacitation of the grantor. Conversely, a durable POA would still effective, and this is why durable powers of attorney are used for incapacity planning purposes.
In some jurisdictions, springing durable powers of attorney are allowed. These powers only take effect if the grantor becomes incapacitated. This can be a better choice, because you give the agent the power to act for you immediately when you execute a durable power of attorney.
There are different decisions that may present themselves. Some of them can be medical in nature, and some of them can be financial. You may not want the same person making both types of decisions on your behalf.
If this is how you feel, you can simply create a durable power of attorney for health care (which is sometimes called a health care proxy) and another durable power of attorney for financial decision-making. You name two different respective attorneys-in-fact, and you can go forward with peace of mind knowing that you have all of your bases covered.
Attend a Free Seminar
Our attorneys are holding a series of seminars over the coming weeks, and we are looking forward to meeting many of our neighbors at these sessions. You can learn a lot if you carve out the time to attend one of them, and there is no admission charge, so it is a great opportunity.
We do ask that register in advance so that we can reserve your seat. Check out our seminar schedule page to see the dates and obtain registration information.
We Are Here to Help!
Our attorney is standing by to help if you are ready to create a comprehensive estate plan that includes an incapacity component. We know that it can be a bit disconcerting to discuss these matters with someone that you have just met, but you can rest assured that we will put you at ease from the start.
You can send us a message through our contact page to request a consultation appointment, and we can be reached by phone at 212-973-0100.